Deposit increases may lead to loose lending

Customers overflow banks with deposits, which gives the banks a surge in money to loan. "Banks are loaded with liquidity and starving for growth," said Paul Miller, an analyst with FBR Capital Markets.

With all the excess money going around, banks could potentially loosen their loan policies.

Sponsor Content

"When competition for loans increases, that shows itself in thinner pricing and eventually in loan structures that are weaker than what they had been," said Allen Tischler, senior vice president of the Moody’s Investors Service banking team.

Related Articles

Articles written by HousingWire Staff are non-bylined, and typically involve press release coverage and aggregation of coverage appearing elsewhere. So who put all these together? Our entire staff does!

This month inHousingWire magazine

The appraisal industry is in the midst of huge disruption as automated valuation models and hybrid appraisal products gain favor with regulators and investors. What does the future hold for appraisers and appraisal companies as they adjust to the new realities of automation?

Feature

As Millennials grapple with paying off student loans, their opportunity to buy a home gets pushed further and further into the future. That delay has consequences far beyond individual students — the growing student debt crisis impacts every part of the economy.

Commentary

There has been a conscious and rapid shift to broaden the use of alternative valuation products for origination. Not every decision needs a $500, full-blown 1004 interior appraisal. And in some markets where appraisers are short in number, the turn times can stretch from days to weeks. What these new alternative — some would say disruptive — valuation products do is enable lenders and servicers to better match the product to the risk by harnessing big data and technology.